United States: California Consumer Privacy Act Amendments Offer Relief, But Challenges Remain

California's 2019 legislative session has drawn to a close with passage of five amendments to the California Consumer Privacy Act (CCPA) during the final days of the session.

Assuming that the bills are timely signed by the Governor before the October 13 deadline, businesses will finally have the complete version of the statute that will come into effect January 1, 2020 (with the exception of regulations expected to be issued by the California Attorney General in the coming months).

The amendments, which were contained in Assembly Bills 25, 874, 1146, 1355 and 1564, provide some relief in the compliance burden placed on businesses in certain areas, such as with respect to employee and B2B data, as well as some helpful clarifications and clean ups to the CCPA. However, the legislature left the law largely intact, and covered businesses face significant challenges in meeting the law's requirements by January 1. Moreover, some of the most significant changes are only temporary, setting the scene for additional amendments in next year's legislative session.

Significant Changes to the CCPA

The following are the most significant changes to the CCPA through the recent amendment process:

  • One-Year Partial Exemption for Employee/ Human Resources Data. Businesses will enjoy a one-year exemption from most provisions of the CCPA for employee and other human resources data they collect (i.e., personal information collected about natural persons in their roles as employees, job applicants, owners, directors, officers, medical staff members or contractors, to the extent it is used within the context of that role). Also exempted is information about such persons' emergency contacts and about individuals related to such persons and whose information is necessary for benefits purposes.

While this exemption should be a welcome relief to businesses, it does not extend to the businesses' CCPA notice obligations, so businesses must still inform such persons, at or prior to the point of collection, of the categories of data collected and the purposes for its use. It also does not extend to the private right of action arising after data breaches. In addition, the exemption sunsets on January 1, 2021. Many had hoped for a permanent exemption, but no agreement was reached. According to committee staff analysis, the one-year sunset gives the legislature time to more broadly consider what privacy protections should apply to employee and human resources data and whether to repeal, revise or make permanent the exemption. Unless the legislature agrees on a permanent exemption during the next legislative session, this information will be subject to all of the provisions of the CCPA after that time. (AB 25)

  • One-Year Partial Exemption for Business-to-Business (B2B) Personnel Data. Businesses will also enjoy a one-year exemption from most of the CCPA's provisions for personal information that they collect about an employee, owner, director, officer or contractor of a business when it is collected as part of B2B transactions, in the context of due diligence regarding, or providing or receiving products or services to or from, the business. Such persons, however, still must be given the right to opt out of the sale of their data and are entitled to bring a private right of action following a data breach. This exemption also sunsets on January 1, 2021. Until then, the combination of this exemption and the employee exemption above should significantly reduce the urgent issues related to 2020 CCPA compliance for B2B businesses. (AB 1355)
  • Right to Require Consumer Authentication. Businesses that have received a consumer access request are allowed to require authentication from the consumer, provided it is "reasonable in light of the nature of the personal information requested." Businesses may also require a consumer to submit a request through their existing account with the business, but cannot require a consumer who does not have an account to set one up for this purpose. (AB 25)
  • Email-Only Consumer Request Mechanism Permitted for Online Companies. While most businesses must make available to consumers two or more designated methods for submitting requests, including a toll-free number, businesses that operate solely online and have a direct relationship with consumers from whom they collect personal information may instead provide such consumers only an email address for purposes of making requests. Businesses that maintain a website must make the website available to consumers to submit requests for information required to be disclosed to them. (AB 1564)

Issues Not Addressed

A number of significant issues raised during the legislative session were not addressed, including the following:

  • Definitions of Personal Information and Sale. While a few minor changes were made to the definition of personal information as detailed in the next section, there was no meaningful narrowing of the term, nor were there changes to the definition of sale. Although there was support for the removal of the term "household" from the definition of personal information, the term was not removed. However, AB 1355 explicitly provides that "the Attorney General may adopt regulations to establish rules and procedures on how to process and comply with verifiable consumer requests for specific pieces of personal information relating to a household in order to address obstacles to implementation and privacy concerns."
  • Customer Loyalty Programs. A bill that would have exempted loyalty programs from the non-discrimination provisions of the CCPA was deferred.
  • Targeted Advertising. There was no action on an industry-backed bill to exempt from the "do not sell" compliance requirements certain data sharing related to targeted advertising.
  • Broader Private Right of Action. Notwithstanding the Attorney General's support, a bill that would have given consumers a private right of action to pursue violations of any of the CCPA's provisions did not move forward.

Additional Clarifications and Clean Ups to the CCPA

The amendments made some additional minor fixes to the CCPA that largely benefit businesses, including:

  • Personal Information Definition. With respect to information capable of being associated with individuals or households, the definition of personal information now includes only information "reasonably" capable of being associated with a particular consumer or household (as opposed to any information capable of being associated with a consumer/household). In addition, the definition of publicly available information (which is carved out of personal information) now includes all data lawfully made available from federal, state or local government records (as opposed to only government records that are used in a way that is "compatible" with the purpose for which such records were made available). Finally, personal information now explicitly excludes consumer information that is "deidentified" or "aggregate consumer information" (as such terms are defined in the statute). (AB 874)
  • Limits to Consumers' Private Right of Action. Consumers may only institute a civil action when the exposed personal information is both non-encrypted and non-redacted (as opposed to non-encrypted or non-redacted). (AB 1355)
  • Revision to Privacy Policy Requirements. Privacy policies must disclose that a consumer has the right to request the specific pieces of personal information collected about them (as opposed to privacy policies being required to disclose the actual specific pieces collected). (AB 1355)
  • No Extra Data Retention Required. A business does not have to collect or retain, for purposes of CCPA compliance, personal information that it would not otherwise collect or retain in the ordinary course of its business. (AB 1355)
  • Non-Discrimination Provision. The CCPA's exemption from the ban on discriminatory treatment applies when the differential treatment is reasonably related to the value that the consumer's data provides to the business (as opposed to the value that the data provides to that consumer). (AB 1355)
  • Warranty-Related Information Retention Permitted. A business does not have to delete information to the extent it is needed to fulfill the terms of a written warranty or product recall conducted in accordance with federal law. (AB 1146)
  • Limited Vehicle Information Exemption. Vehicle manufacturers and dealers have a limited exemption from the sale opt-out right for vehicle information and owner information shared between them for warranty or recall purposes. (AB 1146)
  • Expansion of the FCRA Exemption. Consumer reporting agencies (as defined under the Fair Credit Reporting Act (FCRA)) have an exemption for the collection, sale, disclosure or use of personal information covered by the FCRA, although the private right of action remains. (AB 1355)

The Road to Compliance

When the CCPA comes into effect on January 1, 2020, it will be the most stringent privacy law in the nation. Given the breadth of information covered by the statute and the number of policy changes and processes that must be set in place, covered businesses face challenges to reach compliance by that deadline, as they work to complete the following compliance measures (among others):

  • updating privacy policies to reflect the required disclosures for the 12-month period beginning January 1, 2019 and the consumer rights under the CCPA;
  • creating mechanisms to enable consumers to make requests;
  • creating processes to verify the identity of requesters;
  • establishing a process to timely identify and provide (after a verifiable access request) the specific pieces of personal information collected, the sources and purposes of collection, and the categories of third parties with whom personal information is shared;
  • establishing a process to respond to verifiable deletion requests, including notification to relevant service providers; and
  • determining if they are selling personal information, and if so, creating opt-out links and procedures to comply with "do not sell" requests.

Recent surveys suggest that many companies do not expect to be CCPA-compliant by the January 1 deadline. In addition, companies are still awaiting regulatory guidance from the Attorney General in the hope that it will shed light on some of the trickier aspects of the law, such as how to verify consumer requests and what data should be provided about "households" in response to a verified consumer access request. Whether that is the case remains to be seen, and the Attorney General's Office has not yet announced when its regulations will be issued.

Notwithstanding the uncertainty in some areas, companies should continue to work towards compliance by January 1. Even though the Attorney General will not begin enforcing the CCPA until the earlier of July 1, 2020 or six months after final regulations have been issued, California residents will be able to start exercising their CCPA rights on Day 1, including their rights to request access to their data, opt out of the sale of their data and request deletion of their data, and bring lawsuits under their private right of action with respect to data breaches.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Wilson Sonsini Goodrich & Rosati
Weintraub Tobin Chediak Coleman Grodin Law Corporation
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Wilson Sonsini Goodrich & Rosati
Weintraub Tobin Chediak Coleman Grodin Law Corporation
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions